Solvency II could slash pensions by 20% – UK insurer
UK – Legal & General (L&G) has repeated a warning that annuity levels for UK-based defined contribution pension scheme members in the UK could fall by up to a fifth, if Solvency II is enacted in its current form.
The warning follows claims from the Association of British Insurers suggesting the European directive would force UK insurers to raise an extra £50bn (€57.16bn) in equity, leading to a sharp increase in premium rates paid by policyholders. The claims were made in a letter sent by the ABI to Alistair Darling, chancellor of the exchequer, urging both him and the European Commission to intervene.
Tim Breedon, chief executive of L&G, last month claimed the rules were “a betrayal of savers”, and said retirement income from annuities could be slashed by a fifth as insurers are forced to increase capital reserves. Click here to read full article
